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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11122
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Have not filed my 2012 taxes yet. I owned a house in joint

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Have not filed my 2012 taxes yet. I owned a house in joint tenancy with my father. He died in February, 2012, and tried to turn the unit a rental, but the HOA wouldn't let us.
We finally sold the property (at a loss) in December, 2012. Would the house be considered personal property and therefore, we cannot claim the capital gain loss, or could we declare it as a rental and then sell is and take the capital gain credit. Thanks.

Lane :

Hi,

Lane :

If neither of you lived there as a personal residence, there (although it would not be a "rental," because the HOA by-laws didn't allow it) I would still be considered a capital asset (a non-personal use) asset and you ca take the loss

Lane :

Make sense? ... It doesn't have to be a rental to be an investment property ... Now, again, if this was your residence, then there would be a capital gain EXCLUSION if it were sold at a gain (but there would not be the ability to take a loss, is the other side of THAT coin)

Lane :

Non-personal use = Capital gains tax on and gain on sale ... Personal residence = No capital gains tax, but no capital loss to take on sale

Lane :

(Sorry for the typo ... let me try to say that more clearly)

Lane :

Non-personal use asset = Capital gains tax on any gain upon sale AND capital loss can be taken if sold at a loss

Lane :

Personal Use asset = Capital gains tax is excluded (up to $250,000 for single filers and $500,000 for those filing jointly) BUT no loss can be take if it is sold at a loss

Lane :

I still don't see you coming into the chat session, so I'll move us to the "Q&A" mode. … Maybe that will help … (We can still continue a dialogue there, just not in real-time chat, as we can here)


Please let me know if you have any questions at all ...


Lane

Lane :

Questions?

Lane :

OK, I'll move us now ... again, let me know of you have questions

Lane and other Tax Specialists are ready to help you


Hi Judy,

... just checking back in here, as I ever saw you come into the chat.

Again, let me know if you have questions.

Lane
Customer: replied 3 years ago.


Thanks. So to reiterate, the only person that ever lived there was my parent. Therefore, on Schedule D I would indicate the date acquired 9/2003 for $80K and it was sold in 12/2013 for $50K after expenses (there was a lawsuit over ownership of the parking space, as well as a decline in property value, some improvements, etc.). This would provide me a capital gain loss of $30K. Should I put an explanation in the tax return? I am leaning towards not doing so and if they contact me, then providing the back-up and documentation, which I definitely have.